You currently have $2,000,000 AUD (or the USD equivalent) and are looking to undertake a covered interest

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You currently have $2,000,000 AUD (or the USD equivalent) and are looking to undertake a covered interest arbitrage. Detail the required steps (including numbers/amounts), as well as the profit generated from undertaking such an arbitrage.

USD/AUD Spot Rate	0.94
USD/AUD 6 Month Forward Rate	0.96
USD Interest Rate	8% per annum
AUD Interest Rate	4% per annum

Related Book For answer-question

Fundamentals of Multinational Finance

ISBN: 978-0205989751

5th edition

Authors: Michael H. Moffett, Arthur I. Stonehill, David K. Eiteman

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Posted Date: Mar 24, 2023 02:26 AM

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You currently have $2,000,000 AUD (or the USD equivalent) and are looking to undertake a covered interest

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Fundamentals of Multinational Finance

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